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10-04285-brl Doc 127 Filed 08/17/12 Entered 08/17/12 14:29:55 Main Document Pg 76 of 133 Luxalpha’s account with BLMIS and the delegation of custodial and asset management authority. Each of Hondequin, Egger, Kranz, and Schroeter then executed resolutions purporting to monitor the investment restrictions applied to BLMIS, and approved sales prospectuses for Luxalpha that made no mention of Madoff, despite knowing that Luxalpha was entirely invested in BLMIS and had delegated custodial and trading authority for Luxalpha to BLMIS. Each Moving Luxalpha Director Defendant also participated in Luxalpha’s response to the collapse of BLMIS, and Hondequin and Schroeter even signed two customer claims on the fund’s behalf. The Moving Luxalpha Director Defendants exercised more than “some control” with respect to Luxalpha—indeed, they were “primary actors” who exercised authority, direction, and control over the fund’s investment into New York. See Retail Software, 854 F.2d at 22 (finding jurisdiction over “primary actor[s] in the transaction in New York” who were not “some corporate employee[s] . . . who played no part in” it) (quoting Kreutter, 522 N.E.2d at 45) (alterations in original). Luxalpha’s contacts with the forum should be imputed to each of them because of this agency relationship. 24 24 The Moving Luxalpha Director Defendants rely on cases where courts have dismissed individual defendants where plaintiffs have pled only conclusory allegations, or have not pled facts demonstrating meaningful control or action with respect to the events giving rise to jurisdiction. (UBS Mot. at 20–23 (citing In re Terrorist Attacks on Sept. 11, 2001, 718 F. Supp. 2d 456, 484 (S.D.N.Y. 2010) (dismissing individuals from complaint naming hundreds of foreign parties where claims were “too attenuated”); Duravest, Inc v. Viscardi, A.G., 581 F. Supp. 2d 628, 634–35 (S.D.N.Y. 2008) (dismissing individual where only contact with forum was one letter sent to investors); In re AstraZeneca Sec. Litig., 559 F. Supp. 2d 453, 467 (S.D.N.Y. 2008) (dismissal of individual directors where plaintiff only alleged via a complaint “merely conclusory statements” that directors had knowingly distributed misleading reports); Alki Partners v. Vatas Holding GMBH, 769 F. Supp. 2d 478, 489–90 (S.D.N.Y. 2011) (dismissing three individual defendants where plaintiff had put forward only conclusory statements of fraud, but exercising jurisdiction over additional individual and his bank employer where they provided “affirmative advice” to plaintiffs relating to the fraud); Time, Inc. v. Simpson, No. 02 Civ 4917 (MBM), 2003 WL 23018890 at *5–7 (S.D.N.Y. Dec. 22, 2003) (dismissing claim against individual where “no evidence” that individual “exercised control over... or had any personal involvement in any decisions made by or action taken by” corporation); Sedona Corp. v. Ladenburg Thalmann & Co., No. 03 Civ. 3120 (LTS) (THK), 2006 WL 2034663, at *8–9 (S.D.N.Y. July 19, 2006) (jurisdiction does not exist where plaintiff has put forward “generalized allegations” of conspiracy by foreign defendants backed only by SEC filings showing control relationships between defendants).) In contrast to the situations presented by these cases, the Trustee has presented evidence that each of the Moving Luxalpha Director Defendants took numerous actions to operate and control a feeder fund invested entirely in New York, a showing that, if need be, can be bolstered by jurisdictional discovery. 56
10-04285-brl Doc 127 Filed 08/17/12 Entered 08/17/12 14:29:55 Main Document Pg 77 of 133 C. The Court has Jurisdiction Over the Moving Access Defendants and Delandmeter The Moving Access Defendants and Delandmeter are subject to this Court’s jurisdiction because of their purposeful and systematic direction of investment activity into BLMIS through the Luxalpha and Groupement, and their servicing of this activity. Both Luxalpha and Groupement were funds created, operated and serviced by Access and its co-founders Littaye and Villehuchet, in partnership with UBS. Littaye regularly traveled to New York, at least once a quarter, to meet with Madoff at BLMIS’s offices. (Pergament Decl. Exs. 88 at 23:21–25; 89 at 40:7–41:13.) In addition, Littaye occasionally brought Access’s foreign clients and investors to New York to meet with Madoff. (Pergament Decl. Ex. 89 at 41:18–22.) These quarterly meetings at BLMIS’s New York office were essential to Littaye and Madoff’s continued business relationship and to Access’s continued servicing and marketing of its BLMIS-related funds. Littaye and Villehuchet worked in conjunction with Delandmeter, who played numerous roles for Access, including establishing the articles of incorporation for Luxalpha, and serving as Luxalpha’s director and legal advisor. (Pergament Decl. Ex. 7 at 1; Am. Compl. 31.) 1. Littaye and Villehuchet Operated Access’s International Operations as a Single Business Enterprise out of Access’s New York Office Although each of the Moving Access Defendants were legally separate entities, in reality they operated in conjunction with Access’s New York headquarters as a single business enterprise owned and controlled by Littaye and Villehuchet to funnel money into BLMIS. New York-based AIA Inc. was founded in 1995 as a marketer and distributor of other entities’ hedge fund products. (Am. Compl. 82; Ex. 1 at 8.) 25 It later evolved into a manager for its own hedge funds and investment products. (Am. Compl. 82–83.) While Access offered some 25 AIA Inc. was dissolved in 2010. (See Pergament Decl. Ex. 90.) 57
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